Gillard Takes Australia Leadership After Rudd Resigns

Australia's new prime minister Julia Gillard smiles as she leaves a meeting after Gillard became Australia's first female prime minister in Canberra on June 24, 2010, Photographer: William West /AFP/Getty Images

June 24 (Bloomberg) -- Julia Gillard will become
Australia’s first female prime minister after ousting Kevin Rudd
following a slump in his approval ratings and a clash with the
resources industry over a plan to increase taxes.

Gillard, 48, will be sworn in at 12:30 p.m. after
challenging Rudd for the leadership late last night. Welsh-born
Gillard was elected unopposed by Labor party members this
morning in Canberra after Rudd, who won office in 2007, withdrew
from the ballot.

The change in leadership spurred gains in BHP Billiton Ltd.
and Rio Tinto Group in Sydney trading on optimism the government
will compromise on its mining profit tax. Rudd’s support started
to crumble in April after he shelved his emissions trading plan.
His approval rating fell further as the fight over the resources
tax intensified, with the spat coming to a head over the past 24
hours as colleagues switched their support to Gillard.

“This is the most dramatic leadership change in Australian
political history,” Nick Economou, a lecturer in politics at
Monash University in Melbourne, said in a phone interview.

Rudd, who served the shortest term as leader since 1971,
said in a news conference today in Canberra that he was proud of
his management of the nation’s economy and other achievements
such as the introduction of school computers, construction of
new libraries and proposed changes to healthcare.

“I will serve the government in any manner of
assistance,” Rudd said, adding that he will contest the next
election. Gillard must call a poll by April next year.

Swan Remains Treasurer

Wayne Swan, who with Rudd helped steer Australia’s economy
through a global financial crisis that plunged most of the
world’s developed economies into their deepest recessions since
World War II, will remain treasurer, Sky News reported.

Rudd and Swan oversaw the response to the crisis, boosting
spending on schools and roads, bolstering the banking system,
and distributing more than A$20 billion ($18 billion) in cash to
households. The measures saw gross domestic product expand every
quarter except one during his tenure, keeping the unemployment
rate at almost half the level of the U.S. and Europe.

Swan was elected Gillard’s deputy after abandoning Rudd.
Swan will attend this weekend’s G-20 summit in Toronto on
Australia’s behalf, a spokesman said.

The Australian dollar rose to 87.51 U.S. cents at 11.50 a.m.
in Sydney from 87.39 cents in New York yesterday. Australia’s
benchmark S&P/ASX 200 Index rose 21.3 points to 4507.40.

Rudd’s support began to slide in polls after the flip-flop
on carbon trading, the centerpiece of his plan to tackle climate
change, which he called the “greatest moral challenge” of our
time. Then he proposed a 40 percent tax on the “super profits”
of resource projects in Australia, the world’s biggest shipper
of coal and iron ore, and refused to back down even after
members of his own party objected.

Slump in Polls

Dissatisfaction with Rudd, 52, hit a record 55 percent,
according to a telephone survey of 1,147 people between June 18
and June 20 published in the Australian newspaper this week. The
margin of error was 3 percentage points. Rudd was previously the
nation’s second most-popular leader, after Bob Hawke in the
1980s, according to a Nielsen poll published in March 2009.

Gillard has been Rudd’s deputy since December 2006 and
helped Labor win power from John Howard’s coalition after almost
12 years in opposition. She served as minister for education,
employment and social inclusion and has supported the mining tax.

Awarded the so-called “super portfolio” of education and
employment in 2008, Gillard was responsible for dismantling
former Howard’s labor laws that decreased the power of unions.
Voter opposition to the laws was seen as the pivotal issue in
the 2007 election victory.

Industrial Law

Gillard studied at the University of Adelaide and Melbourne
University, where she graduated in 1986 with degrees in arts and
law and joined law firm Slater & Gordon in Werribee, Victoria in
1990, practicing industrial law. The firm now has a meeting room
named after her in its Melbourne office.

Gillard will face an opposition coalition led by Tony
Abbott, a former amateur boxer who studied for the priesthood.
Abbott has promised not to adopt the resource profits tax and
has offered a more generous plan for parents to take leave from
the workforce after they have a baby.

Rudd won in 2007 with promises to withdraw Australian
troops from Iraq and ratify the Kyoto treaty on climate change.
While the troops were out by July 2009, his efforts to pass a
carbon trading plan similar to systems used in Europe were
scuttled by the opposition coalition in the Senate.

“I am looking forward to working with the new prime
minister in designing an appropriate carbon policy for
Australia,” Warwick McKibbin, a Reserve Bank of Australia board
member and international economics professor at the Australian
national University, said in a phone interview.